PACSUN ACQUIRED BY PRIVATE EQUITY FIRM GOLDEN GATE CAPITAL

San Francisco-based private equity investment firm Golden Gate Capital has completed its acquisition of specialty retailer Pacific Sunwear of California, Inc., which concluded its restructuring after completing all required actions and satisfying all closing conditions to its Joint Plan of Reorganization. The plan was confirmed by the United States Bankruptcy Court for the District of Delaware on September 6.

This news comes just six months after the company filed voluntary petitions to restructure under Chapter 11 in April.

PacSun has significantly restructured and reduced its long-term debt and annual occupancy costs, as well as improved its capital structure. Pursuant to the plan, Golden Gate Capital has converted more than 65 percent of its term loan debt into the equity of the reorganized company and has provided a minimum of $20 million in additional capital to the reorganized company to support PacSun’s long-term growth objectives. Wells Fargo has also provided a five-year $100 million revolving line of credit, subject to certain conditions.

“PacSun offers consumers the most compelling and desirable mix of brands celebrating the California lifestyle,” said Josh Olshansky, managing director at Golden Gate Capital. “Now, with a strengthened balance sheet, reduced long-term debt and reduced annual occupancy costs, the company is well-positioned to build a stronger future and achieve long-term success. We look forward to continuing to partner with PacSun and its experienced management team as the company executes its strategic plan, enhances its omni-channel customer experience and pursues growth opportunities.”

“We are excited to be emerging from a quick and efficient Chapter 11 process as a stronger and more competitive company,” said Gary H. Schoenfeld, president and chief executive officer of PacSun. “We thank Golden Gate Capital for their partnership, which enabled PacSun to navigate the restructuring process in only five months, and we look forward to continuing our strong working relationship as we embark on our next chapter. For more than 20 years, PacSun has been the largest retail partner for many of our industry’s most dynamic emerging brands, and we are very pleased to have had Golden Gate Capital’s full support in ensuring that all branded partners – both large and small – are to be paid in full as part of our plan. Looking ahead, we plan to continue our brand transformation and deliver our customers the most relevant specialty apparel and sneakers along with the best brands and great style that define PacSun and our unique 34-year heritage. Our entire team is energized as we enter the important holiday season and look further ahead to 2017.”